Steve Jobs, right, showed some friends the qualities of the new iMac computer unveiled Monday at MacWorld in San Francisco. After his keynote address, Apple co-founder and CEO Steve Jobs mingled with the people looking at the newest offering from Apple. By Brant Ward/Chronicle less

Steve Jobs, right, showed some friends the qualities of the new iMac computer unveiled Monday at MacWorld in San Francisco. After his keynote address, Apple co-founder and CEO Steve Jobs mingled with the people ... more

Photo: BRANT WARD

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Apple Computers chief executive Steve Jobs introduces the new flat screen iMac at Macworld in San Francisco, Monday, Jan. 7, 2002. The screen is on a swivel stand.(AP Photo/Paul Sakuma)

Apple Computers chief executive Steve Jobs introduces the new flat screen iMac at Macworld in San Francisco, Monday, Jan. 7, 2002. The screen is on a swivel stand.(AP Photo/Paul Sakuma)

Ending weeks of speculation leading up to Macworld 2002, Apple Computer Inc. introduced a line of iMacs with flat-panel screens yesterday.

The roll-out appeased many Mac users who had long been asking the firm to redesign the popular computers.

"We have been working on this for two years," Apple chief executive Steve Jobs told an audience of 4,000 gathered at San Francisco's Moscone Center yesterday morning. "I know some of you wanted it sooner, but I think you'll agree it was worth the wait."

The new line features a swiveling 15-inch flat screen connected to a 10 1/2- inch circular base containing a G4 processor. The 800-megahertz version of the new iMac will start shipping at the end of this month with a retail price of $1,799, according to Jobs. Two other models, running at 700 MHz, will sell for as low as $1,299.

Jobs revealed the skinny version of its chubby predecessor to a cheering crowd packed inside the convention center during a two-hour keynote address yesterday.

True to form, Apple had kept its new product under tight wraps, teasing its users with cryptic messages on its Web site that promised to blow them away.

Jobs called the new iMacs "a technical tour de force" with their flat screens able to rotate 180 degrees and their hardware, which includes up to 1 gigabyte of memory, tucked inside a base the height of a CD jewel case.

Wires for the computer connect to the back of the base while DVDs and CDs are inserted in the front. The whole machine weighs 22 pounds.

Joseph Beaulieu, an analyst for Morningstar Inc., said he is a big fan of the design, but because design is such a significant aspect of the new iMac, it "runs the risk of people thinking it's hideous."

"It looks kind of like a big desk lamp," Beaulieu said.

Originally released in May 1998, the iMac had changed little in appearance since then. Apple sold 6 million of the computers with their bright-colored monitors.

Many Mac enthusiasts had been waiting for Apple to redesign the iMac. Its popularity has been declining, with fiscal fourth-quarter sales falling to 294, 000 units for $276 million from 571,000 units for $593 million a year ago in the same period, according to Bloomberg News.

"At the last couple of Macworlds, people have come away disappointed because there were no real changes to the iMac," Beaulieu said.

He added that criticism against Apple has been somewhat unfair since competitors like Gateway and Dell have done nothing to change over the years, either.

"You look at the rest of the PC industry, and the last time I checked, they were still shipping big beige boxes with wires hanging out of the back," Beaulieu said.

Apple is banking on the new iMacs to give the company a much-needed boost.

"We'll get them in high-volume production this quarter," Jobs said.

Enderle said the iMac will likely draw more customers into Apple's retail stores, largely because it looks so different that people will want to play around with it.

"It looks like it meets the criteria you want to have for a flagship product, and they really needed one this year," Enderle said. "Much of the rest of the product line is looking kind of old."

Beaulieu said that although the iMac design looks impressive, he is not sure if the looks will be enough to convince customers to go out and buy it, especially if price is a driving consideration.

"I think it's very competitively priced, but if you're only looking at the technical specifics of the computer, at that point I think Apple isn't very competitively priced compared to Dell," he said, referring to the popular Texas computer retailer.

He added that Apple was wise to stagger the release of its three models of iMacs because early adopters will likely gravitate toward the high-end versions in the beginning, leaving more time for the economy to bounce back and lure mainstream customers to the lower-end versions.

"Hopefully we'll see the economy pick up and more people buying," Beaulieu said.

Also during yesterday's keynote address, Jobs introduced a 14-inch iBook notebook computer, as well as iPhoto, software that allows users to import, edit and print digital photos with greater ease.

Jobs said iPhoto will be made available for free today, via the Internet, on all computers with Mac OS X.